Affordable, reliable energy – it used to be a way of life in Australia. Flick a switch, the lights came on, and your power bills were barely worth a dot point on the family budget plan. The country was blessed with enough coal to satisfy our needs as well as the needs of many other nations for endless years to come, it seemed.
But as Chief Scientist Dr Alan Finkel’s report into Australia’s electricity market reveals, we are experiencing a very different way of life in 2017. Power supply interruptions are commonplace in a growing number of jurisdictions due to the impact of renewable energy and the sudden closure of baseload power stations; power bills are now one of the major budget items driving families to financial despair; and our coal, which is exported to nations which use it to power clean coal power stations, is demonised by those who refuse to recognise the shortcomings of wind and solar power.
However, Finkel injected a dose of reality into the debate with his review of the National Electricity Market, which highlighted that the current crop of renewables has contributed to significant instability in the electricity market. The result has been higher electricity prices and crowding out of new investment from traditionally reliable sources of power such as coal and gas.
While much of the focus of the energy debate has been on ways to incentivise clean energy, there has been very little said to date about incentivising reliable and affordable low-emission energy.
Because of Australia’s economic success on the back of cheap electricity from coal, affordability and reliability in the electricity market has been taken for granted.
But with the rush of heavily subsidised renewables into the market, accompanied by the indecent haste to retire traditional power stations with no ready replacements, the “hidden value of these services has emerged”, says Finkel.
Finkel contends that electricity prices will be lower under a Clean Energy Target, as opposed to the current Renewable Energy Target regime, because this will enhance reliability of supply.
Solar and wind cannot deliver all of our power needs no matter how many wind farms or solar panels are built because sometimes the wind just doesn’t blow and the sun just doesn’t shine. If there is not a sensible baseload power generation backup plan in place, consumers end up being hit with much higher prices to pay for expensive band-aid solutions.
So long as the reliability problem exists – that wind and solar undercut new investment in traditional baseload generation – Finkel’s solution to deliver lower power prices will never be a reality.
One of the ways the Turnbull Government could incentivise reliability would be to offer immediate subsidies for new investment in reliable, low-emission baseload generators.
More than 20 countries have high efficiency low emission coal-fired power stations planned or under construction.
There’s no reason why Australia, with all of its abundant natural resources, shouldn’t embrace the same high efficiency low emissions technology to stay competitive with other nations.
Federal and State Governments now need to block out the white noise generated by the extremists and focus on the end game: energy that is reliable, affordable and clean so that Australians can work, support their families and live in a cleaner energy future.